How to invoice as a labour-only subcontractor

What "labour-only" means

You're paid for your work, such as hours, days or a price for a task, while the contractor supplies the materials and often the plant. It's common for labourers, carpenters, plasterers, bricklayers, groundworkers and many other trades. Because there are no materials on your side, the whole of your invoice is normally labour for CIS purposes.

A label isn't enough on its own. Whether you're genuinely self-employed depends on the working arrangement. GOV.UK's employment status guidance and HMRC's CEST tool can help, and CIS has its own status questions.

Register for CIS first

If you work for a contractor in construction, register as a subcontractor with HMRC. GOV.UK says contractors deduct 20% from registered subcontractors and 30% from those who aren't registered. With gross payment status, nothing is deducted. Registering takes minutes and can save you 10% of every payment until you settle up through Self Assessment.

What to put on the invoice

• "Invoice", with a unique invoice number and the date
• Your name (or trading name), address and contact details
• The contractor's company name and address
• The site name or reference, and the week or dates worked
• A breakdown of the labour: days or hours, and the rate
• The total, plus a note that the CIS deduction is made by the contractor
• Your UTR (many contractors ask for this so they can verify you)
• Payment terms and your bank details

Our sole trader invoice requirements page covers the general legal minimum.

Worked example: a daywork week

A labourer on £160 a day (8 hours) works Monday to Friday plus a 4-hour Saturday morning at time and a quarter:

If the subcontractor is registered for CIS, the contractor deducts 20% of £900 = £180 and pays £720, then issues a deduction statement. The £180 counts towards the subcontractor's tax and National Insurance through Self Assessment.

Some subcontractors show the expected deduction and the net amount on the invoice as well. That's fine, but the contractor's calculation and deduction statement are what count. If they differ, ask.

Price work vs daywork

Daywork is paid by time, as above. Price work is a fixed amount for a defined task, such as boarding a floor or laying a run of blocks. For price work, describe the task and the measurement clearly ("Plaster boarding, plots 12–14, 145 m² @ £6.50/m²") and refer to any agreed quote or rate sheet. Clear descriptions avoid arguments about what was finished.

Small items and expenses

Even labour-only workers sometimes buy fixings or consumables. If you do, list them separately with the cost. Under CIS, the contractor can exclude materials you bought from the deduction, but only if they're identified. Your own tools, and travel to the site, aren't "materials" for CIS purposes.

Mistakes to avoid

• Not registering for CIS and losing 30% instead of 20%.
• Invoicing without a site reference, so it gets lost in the contractor's accounts.
• Forgetting to keep the monthly deduction statements, which you need for your tax return.
• Adding VAT when you're not VAT registered. If you are registered, check whether the reverse charge applies.
• Reusing an invoice number. Each invoice needs its own unique number.

Worked example: price work with fixings

A plasterer agrees £6.50 per m² to board plots 12–14, measured at 145 m², and buys £57.50 of fixings that the contractor agreed the plasterer would buy. The invoice shows two lines:

For a registered subcontractor, the contractor deducts 20% of the labour only: 20% × £942.50 = £188.50. The payment is £1,000.00 − £188.50 = £811.50. If the fixings had been lumped in with the labour as "£1,000 for boarding", the deduction could have been taken on the full amount, which is £200.00, or £11.50 more held back until the end of the tax year.

Matching payments to deduction statements

CIS works in tax months, which run from the 6th of one month to the 5th of the next. Contractors must give you a payment and deduction statement for each tax month in which they paid you. Check it against your invoices. Say you invoiced four daywork weeks of £900 each that were paid within one tax month:

• Gross paid: 4 × £900 = £3,600.00
• Deductions: 20% × £3,600 = £720.00
• Net received in your bank: £3,600 − £720 = £2,880.00

If the statement shows a different gross figure, it's usually a week paid in a different tax month than you expected, not an error, so look at payment dates before raising it. Keep every statement. You'll use the totals on your Self Assessment return, and our guide to claiming back CIS deductions explains what happens next.